Consumer

Person who uses the product

Customer

Person who buys the product

Gatekeeper

Person who oversees care of another

Think of 3 Examples:
1. Nurse
2. Nanny
3. Parents

Consumer demand constantly changing based on the economic shifts in a country,

Is
city or region and on the availability of new products in the
marketplace.
During poor
Fall
economic times the
demand for wants
will:
Why? People are spending wisely, mostly on needs.
Glut

An oversupply of goods sometimes due to an over estimation of

demand

As a product
category becomes
popular

More retailers enter the market (tattoo parlors)

Gauging
Essential to marketing.
fluctuations in
consumer demands
is

2.2

Product Life Describe the changes in

Cycles
consumer demand over time.
Profitability Stages of PLC
?
1. Introduction

Target Market
Innovators

Pricing Strategy
Skim-High

Stars

2. Growth stage

Early adopters

Cash Cows

3. Maturity Stage

Early Majority

Penetrate-med
high
Penetrate-med

Cash Cows

4. Decline Stage

Late Majority

Lower

Dogs

5. Decision Point Stage

Laggards

liquidate

Identify at least 1 product for each of the 5 stages of the PLC: Examples:

Think of one
example for
each stage

1.
2.
3.
4.
5.

Iggy Azalea
Bruno Mars
smartphones
digital cameras
traditional film cameras

1.
2.
3.
4.
5.

3-D television
Blue Rays
DVDs
CDs
VCR

Consignment Allows retailer to return unsold product to the manufacturer after

displaying them for a period of time.
Shelf
Allowance

Money paid to the retailer to provide space for a product

Bust

When a product is pulled before it has recaptured the costs of production

Most
Important
Stage

Growth stage

Benefit of
being first

No competition initially

Market Share A companies sales as a percentage of total sales for that market
Barriers to
entry
Examples

Factors that prevent companies from realizing a profit in a given market

1. small market
2. cost of research and development/know how
3. design costs
4. lack of distribution channels
5. cost of raw material

Companies Are often very successful during the middle portion of the growth stage
that use a
using low prices
push strategy
Maturity
Stage

Period during which sales of a product increase more slowly, if at all.

Profits
during this
stage are
usually

High

Profits
Develop new products
obtained
during this
stage are
often used to

Decline
Stage

When a company is unable to find new customers for a new product

Strategies to Redesign, reformulate, repackage

boost sales in
the decline
stage
Decision
End of the road
Point Stage
Strategies for New uses, new market
this stage
Niche
Market

A small section of a market, which has little competition

Target Market

Innovators

Early Adopters

Majority
Late Majority
Product Life Cycle
Introduction
Growth
Maturity
Decline
Profitability
Question Mark/ Question Mark
Star
Cash Cow
Dog
Pricing Strategy
Skim
Penetrate
Penetrate
Lower

Laggards
Decision Point
Dog

Liquidate

2.3
Cohorts

Groups that share common characteristics and buying

habits.

Consumer Segment

Identified group of consumers with common

characteristics and buying habits

Consumer Segment can also Target Market

be called a
Primary Market

Most likely consumers

Secondary Market

Other Occasional consumers

Demographics
Includes:

Obvious characteristics that categorize people

Age
Gender
Family life cycle
Income level
Ethnicity
Culture

Consumer profiles are demographics

built using
Pre Customers

0-9: children influence gatekeepers who make the decisionMarketers try to appeal to both

Allowance Customers 10-15-Gatekeepers still responsible for most decisions, not all
Youth Market

16-19-Rely on gatekeepers for financial support-needs. Use

their income to purchase wants

Post-Secondary Market 20-25-Start up products: cheap cars, furniture, kitchen stuff

Family Formation

Nesters 25-40-career, marriage, home, children. Major

purchases

Establishment

40-55- Earning maximum salaries, disposable income

increasing. Quality, luxury, trips, investments

Mature Market

55+: Fastest growing market today. High disposable income.

Many retiring early.

Baby Boomers

Huge group, born between 1946-1963

Many of the major

trends in the last 50
years

Were started by the baby boomers.

Gender: More products Women

are exclusively
marketed to:
Products that were
formerly targeted to
women or men

Are now being marketed to both genders

Family Life Cycle

Determines many of the consumers wants, needs and

purchasing patterns.

A business can sell its It will tailor its marketing efforts to match the needs of each
products or services to one.
various family lifecycle groups but

Income level

Businesses research the

following indicators to
determine the income
of specific groups of
consumers

Consumers can be grouped by how much money they have or

earn.

Postal codes
Employment
Number of children
Education
Property Ownership

Ethnicity and culture

Businesses that do not understand the culture of their

consumers risk offending them.

When marketing in
another country

It is essential to research the culture of the target market.

Psychographics

Is a system for measuring consumers beliefs, opinions and

interests

Examples

Religious beliefs
Tastes in music
Lifestyle
Attitudes toward health
Personality traits
Attitude towards the Environment

Psychographic traits
are less obvious

Than demographics and much more difficult to measure, but

they are equally important to businesses

Geographics:
Consumers

Living in different geographic locations have different wants

and needs.

3 main geographic
categories

Urban
Suburban
Rural

Urban consumer

1. lives within: an: apartment, condo or house with small

yard
2. Spends on: cultural, restaurants, parking,
transportation

Suburban Consumer

Spends money on: cars, gardens, barbecues, household stuff

Rural consumers are

often

Farmers or people who have large pieces of land

Rural consumers often Trucks, riding mowers, tractors

need
Product Use Statistics Categorize consumers by how frequently they use a specific
type of product
4 Types of product use
consumers

Pareto Principle

1.
2.
3.
4.

Heavy User
medium user
light user
non-user

Few rules are more widely quoted in marketing today than the
80/20 Rule (the Pareto's Principle), which states that 80% of
your sales come from just 20% of your customer base.
In this age of relationship marketing, this rule has become an
often-heard battle cry to focus our efforts on maintaining the
loyalty of customers belonging to the golden 20% that drive
most of our business, while spending less effort on the trivial
other 80%.

Point of Entry Target

Those who will enter a category

True non user

Individuals who do not plan to use products in a category

Marketers must change Value equation

a non-users
Almost all consumers In the introductory stage
are non users

2.4- Consumer Motivation

Motivation is

Biological, emotional, rational or social force that

activates and directs behaviour.

Biological needs are

Dominant because they have their roots in the basic

need for survival.

Emotional needs:

The value equation places: pleasure on the plus side

and the pain involved in earning the money to afford it
on the negative.

Marketers use the following to

make people want products:

Thorndikes Law of Effect:

Maslows Hierarchy of Needs

Cannot worry about higher

level needs until:

Peer Pressure
Celebrity Endorsement

Consumers are motivated to buy products that produce

positive events and to avoid products that produce
negative events
1.
2.
3.
4.
5.

Physiological
Safety
Affiliation: Friends, relationships
Esteem: success
Self Actualization

Lower level needs are met.

Destination Locations

Large ticket item buying

process

Stores that consumers will visit and will travel to get

to. Usually for large ticket items or specialty items.
1.
2.
3.
4.
5.
6.

Want is created
Criteria is set-Features needed
Search begins
Decision is made
Purchase is made
Purchase is evaluated

Shopping Good

Categories of products instead of brands

If the consumer has not

decided on the brand

The store display, selection, price, and packaging will

influence the decision

Impulse items

Goods that are purchased with no forethought. candy

bar at checkout
Push strategy
Pull Strategy
Combo Strategy

Impulse
Shopping
Big Ticket/Specialty